The dos and don'ts on holiday gift cards

If you are thinking about checking off your shopping list by stocking up on gift cards, you are not alone. The National Retail Federation expects gift card sales to account for more than $28 billion this holiday season, with more than 80% of shoppers expected to buy at least one gift card.

This interest has led to an online market for used or unwanted gift cards, and the Wisconsin Department of Agriculture, Trade and Consumer Protection advises consumers to be cautious of fraud if they are looking to save money by buying cards second-hand.

“The FBI issued a warning against buying gift cards from auction or classified ad sites where the price is significantly lower than any sale prices at retail,” said Sandy Chalmers, Division Administrator of Trade and Consumer Protection. “Never provide credit card numbers or bank account information or wire money to a person who advertises items at a price that’s too good to be true.”

It is best to buy gift cards directly from the retailer or from an authorized merchant. If you are considering buying an unused gift card second-hand, make sure you are purchasing it from someone you know and trust. Used or unwanted gift cards show up for sale online, and while some cards may be legitimate, others may be counterfeit, may be drained of their value or may have been stolen from a store and never activated at a register.

If you plan to sell a gift card that you received over the holidays, only accept cash from a buyer, as a check or money order could be fraudulent. Never give the buyer the card number and PIN in order to verify its value – the buyer could use that information to drain money from the card without buying it from you.

If you intend to give or expect to receive gift cards this holiday season, follow these simple tips to ensure that the user gets the full value of the card:

Read the fine print on the card to ensure that you understand any rules on usage and any associated fees. Federal rules require any fees to be disclosed prior to purchase.

Also, dormancy, inactivity and service fees are allowed only if the recipient has failed to use the card for more than one year. After that, fees are limited to one per month, but there is no limit on the amount of the fee.

Inspect the card before you purchase it to ensure that no protective stickers have been removed and that the pin number has not been exposed. Report any damaged cards to store management.

Always give a gift receipt with the card to verify the value of the card and the date of purchase. Make sure the recipient of your gift card holds onto the receipt until they have spent the entire value of the card.

Use your card the first opportunity you can to ensure that you get the full value.

Keep your cards safe. Make a copy of the front and back of the card and keep it with the original receipt. Contact the issuer immediately if you lose a card or if it is stolen, but be aware that you may not be able to replace it. Some issuers may replace the card for a fee.

For additional information or to file a complaint, visit the Consumer Protection Bureau at datcp.wisconsin.gov, send an e-mail to datcphotline@wisconsin.gov or call the Consumer Protection Hotline toll-free at 1-800-422-7128.